Cloud customers are always searching for new approaches, technologies, and strategies. Here’s what to look for — and look out for — in a rapidly evolving field.
Every CIO knows the cloud market is always drifting in new directions. But what you may not realize is that it’s possible to keep pace with cloud market changes, and even gain the upper hand on vendors, by adjusting your enterprise’s cloud strategy to take advantage of fresh approaches and emerging opportunities.
CIOs need to view the cloud as a business necessity, not just a powerful technology, says Andy Tay, lead at Accenture Cloud First, a cloud advisory and services firm.
“The cloud has evolved into the operating system of the future enterprise, transcending its initial role as a cost-saving measure,” he explains. According to Tay, the cloud is now the foundational backbone of a reinvention-ready digital core, providing the components needed to power the rapid development of new capabilities and business models.
Is your organization doing all it can to take advantage of a rapidly changing cloud market? Here are seven trends that will help you turn cloud market evolution into an opportunity.
1. Centralizing cloud operations for enterprise-wide advantages
A CIO should secure both business and technical sponsorship for their cloud program, advises JB McGinnis, a principal at Deloitte Consulting. This should be followed by establishing a center of excellence, a centralized entity that provides guidance, expertise, and support for cloud initiatives in specific areas.
“Invest in learning and development, which can help to retain your existing talent and attract new talent,” he says.
McGinnis also recommends encouraging cloud developer teams to explore and innovate within a safe framework. “Activities such as immersion days, hackathons, and innovation days can all foster leadership opportunities and contribute to a vibrant community culture.”
2. Rethinking strategies to rein in costs and target benefits
Cloud market innovations, particularly those enabled by AI, are outpacing actual demand, says Anay Nawathe, a director with technology research and advisory firm ISG. “As a result, many CIOs now feel overwhelmed by a multitude of choices, experience fear of missing out, and make hasty, suboptimal cloud decisions.”
The scope of cloud strategies has expanded significantly over the past several years, Nawathe observes. “Once a purely infrastructure-driven exercise, cloud services have rapidly moved up the technology stack to the data and application layers, incorporating all infrastructure across enterprise private clouds, multiple public clouds, and at the edge,” he says. “Yet not every application and data workload belongs in the public cloud, and enterprises need to ensure they are deploying these workloads in the right manner.”
The best way to approach today’s cloud market is through intentional, use-case-driven cloud investments, Nawathe says. “This requires enterprises to understand their individual application strategies, and to use that understanding to build a cloud ecosystem and supporting capabilities that will empower application teams to run at the pace they need while managing costs and risk.” Meanwhile, he adds, an increased focus on governance to provide the guidelines and guardrails for applications teams is critical for successful implementation.
Unlike past strategies, which prioritized rapid cloud growth for the sake of innovation, the current approach emphasizes financial rigor and technical due diligence. “A requirement to develop a comprehensive total cost of ownership and return on investment analysis, prior to making cloud investments, not only allows enterprises to manage their budgets, but it also requires application teams to clearly articulate their requirements and establish a strategy for successfully adopting new technologies,” Nawathe says.
3. Partnering for innovation
Accenture’s Tay says CIOs should leverage cloud partners to their strategic advantage. “Hyperscalers and other emerging ecosystem providers are investing heavily in innovation and advanced technologies, including generative AI tools and capabilities that can massively accelerate modernization,” he observes. Bringing in trusted modernization partners is a pro move, Tay suggests. “These experts will help guide decisions and infuse modern practices across every step of the cloud and digital core journey.”
4. Diversifying and aligning for efficiency and business gains
It’s important to approach today’s cloud market with business outcomes and metrics top of mind, advises Arvind Joshi, chief operating officer for global technology and co-head of public cloud at JPMorgan Chase. “With a multicloud approach, large enterprises can distribute workloads, making them better equipped to mitigate service disruptions, manage their data, and boost cost efficiency.” On the other hand, he warns that a multicloud strategy’s benefits can’t be optimized without maintaining a strict focus on measuring progress by tracking KPIs on execution, risks, beneficial outcomes, and cost.
Joshi also stresses the importance of comprehensive planning involving business and technical stakeholders, which he believes is critical when building a cloud strategy. “There must be alignment with overarching priorities for the technology organization and the business,” he says. “With a consistent operating model across-cloud and on-prem, and seamless integrations that help application developers build and run code, cloud strategy has the potential to drive business value.”
5. Going ‘full-cloud’
You’ve got to get off the legacy tech, advises Daragh Mahon, CIO at freight carrier and transportation and logistics company Werner Enterprises. “Adding modern cloud solutions to a legacy tech stack is like building a new house on a rotten foundation — it will eventually cause problems and be expensive to fix.”
Mahon recommends immediate action for enterprises still mired in legacy technologies. “If you move off your legacy systems now, you’ll save yourself the trouble of disentangling them from your tech stack when they inevitably become obsolete,” he explains. “You don’t have to worry about cloud solutions becoming outdated because they’re constantly updated and easier to replace.”
Prioritizing cloud solutions is an important first step when exploring new technology options, Mahon says. “If possible, purchase the solution rather than building it.” He observes that cloud solutions are quicker to deploy than on-premises software and generally require less upkeep, eliminating the need for manual upgrades and patch management. “They’re continuously updated, ensuring you’re always using the latest version.”
6. Recentering strategies around business value
A modern cloud strategy calls for ongoing business/technology alignment, says Seth Robinson, vice president of industry research at CompTIA. He notes that until now most IT departments have focused on building systems dedicated to supporting business activities, followed by monitoring performance and maintaining system health. “In a modern cloud model, there’s still technical work in standing-up virtual resources and addressing technology hurdles, but there’s far more importance on ensuring that systems are aligned with business objectives,” he says.
Modern cloud strategy requires a solid understanding of business objectives, accompanied by technical skills and financial acumen, Robinson says. While a CIO may “own” the final decision on a specific cloud strategy, the collaborative decision-making process now favored by many enterprises brings other business leaders into the picture.
Looking forward, Robinson believes that careful, detailed cloud planning is essential. “A well-managed cloud strategy can greatly improve flexibility and resiliency in business systems, but without enough attention to detail enterprises can run into cost overruns and cybersecurity vulnerabilities.”
7. Making more selective cloud commitments
Today’s cloud market is far more cost-conscious than in past years, says Randy Shore, vice president of product delivery and support at materials-handling equipment manufacturer Kion. “The state of the economy and funding is encouraging companies to find ways to make their dollar go farther.”
CIOs who were once willing to experiment or play around with cloud services are now maturing and bringing specific use cases to the cloud, Shore says. Increased selectivity also means that some IT leaders are now considering moving some of their workloads back on-prem — particularly on the tooling side. Such an approach, he notes, allows using the cloud to dynamically scale infrastructure and leverage managed services from cloud providers. “It has given users the ability work with cloud service providers, allowing them to go ‘rate shopping’ and determine which plan is the best fit, and price, for their use case,” Shore says.
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